3rd Annual CIO of the Year Awards

By Adam Blair — August 05, 2013

Today’s CIOs need to speak many languages. No, they don’t literally need to understand French, Chinese or Urdu, nor even necessarily to have mastered multiple computer coding lingos. But in an environment where both the retail business and its technology are in the midst of rapid change, successful CIOs do need to hear and understand what needs to be done, and to translate those needs into not just what can be done but what should be done.

The executives being honored with RIS News’ third annual CIO of the Year Awards have shown themselves capable of speaking the “native languages” of many groups, both within and outside the retail enterprise. They’ve done more than simply keep pace in today’s environment: they’ve achieved tangible, measurable business results that have put their companies out ahead of the curve.

The 2013 CIO of the Year Awards include three competitive categories as well as a Lifetime Achievement award:

Innovation: Awarded to the CIO that implemented an emerging technology that drove ROI through top-line growth, better customer satisfaction, or bottom-line savings.

Strategic Impact: Awarded to the CIO that implemented a project that is advancing their company in a new direction, market, or channel(s).

Rookie of the Year: Awarded to the CIO who has made a significant impact on the organization in the first year on the job.

The winners were announced on June 19 at a gala dinner event held during the 12th annual Retail Executive Summit at the Grand Del Mar, Del Mar, CA. RIS is happy to honor these talented, innovative leaders with its CIO of the Year Award.

As online analytics have become more sophisticated, e-commerce has gained an advantage over brick-and-mortar stores when it comes to tracking customers’ paths to purchase. American Apparel was eager to apply in-store equivalents to online analysis, with the ultimate goal of increasing sales and conversions while also improving the customer experience.
CIO Stacey Shulman led a team that tested and installed an advanced in-store analytics platform capable of interpreting streams of digital video and recognize human beings’ movement throughout the store. Now deployed chainwide, the solution lets American Apparel measure not simply the number of store visitors but customers’ movement within the store, as well as how these behaviors tie into actual register sales.

“This is technology that’s used every day by our stores,” says Shulman. “And when the stores don’t get the data, they’re all over us demanding their daily reports.” That store-level hunger for this data is “exactly what we want,” she adds.

Shulman’s team has employed a holistic approach, feeding this customer data into the retailer’s labor scheduling module. This allows managers to more accurately schedule employees where and when they are most needed to maximize sales. The video analytics platform also made it unnecessary to maintain a separate loss prevention video recording system, resulting in a 40% capital expenditure savings.

Insights gained from the platform have helped the American Apparel operations team increase sales in stores and reduce theft. The availability of searchable, instantly available video has created a cultural shift that puts headquarters operational personnel much more directly in touch with the goings-on at stores all across the country.

Shulman gives credit to her team as well as to a corporate culture at American Apparel where “everyone is free to innovate. I see my responsibility as establishing that culture and a framework where team members can do their best. If you put a focus on innovation, creati vity, taking charge and personal initiative, people have the freedom to be creative as well as the tools to prioritize their creativity correctly,” she says.

Ambitious growth and profitability goals, including 400 to 500 new store openings and 1,500 store renovations annually, set the stage for a revamped IT organizational operating model at Family Dollar. CIO Josh Jewett led the drive to enable a wide range of simultaneous initiatives, including a product assortment expansion, improvements in store labor productivity by leveraging new workforce management software, new global sourcing supply chain management and PLM technology, and the creation of a secondary domestic supply chain through a partnership with McLane.

“As CIO, a big part of my job is to understand the CEO’s agenda, and in Family Dollar’s case, it’s been related to organic growth and profitability,” says Jewett. “And as CIO, it’s important to understand enough about your business to know how IT can help: how and where to apply it, and what levers to pull to achieve these goals.”

Jewett implemented organizational and leadership changes for the IT organization that created five cross-functional IT Customer Service Teams to support these initiatives. This model provided significant improvements in teamwork and productivity, with the same-sized IT teams accomplishing more work and meeting timeline commitments dictated by the business without exceeding the budget.

“We had groups lined up with each of our major business units already, but they didn’t include all the constituent IT skill sets needed to accomplish their missions,” says Jewett. “For instance, the teams had analysts and project managers, but before this transformation they wouldn’t have included technical analysts, developers or designers. There also wasn’t a direct partnership between those that built the systems and those that ran them.”
Family Dollar’s IT mantra of “better, faster and cheaper” helped dictate the IT department’s approach. “We had to do more with the same team, and what came out of the exercise is that the same team, organized differently, could accomplish more work,” reports Jewett. For the company as a whole, results have included net income increases of 10.7%, gross profit increases of 6.2% and comp store sales increases of between four and six percent during the past several fiscal years.

Steve Black is being honored as Rookie of the Year, but he’s hardly a newcomer to the retail business or technology. Black has held key positions in areas as diverse as store operations, marketing, sales and IT at retailers including Bruno’s Supermarkets, Buy For Less and United Supermarkets of Oklahoma.

However, Black earned the CIO title in August 2012 at his current company, Sprouts Farmers Market – and then a few months later added another “hat,” that of Chief Marketing Officer.

Black believes this combination, while still relatively rare, is part of an industry trend. “From the marketing standpoint, 10 years ago, their three major topics revolved around TV, radio and print advertising. Today, it’s cloud, mobile and social. Being both the CIO and the CMO helps me understand where the world is going versus where the world is now, and to try not to fit marketing plans into anything that will be short-lived.”

Based on inefficiencies found in data aggregation across systems, Black implemented a BI and merchandise analytics application early in 2013 to improve the availability of timely, relevant insights, including merchandising, marketing, store operations and management. Expanded use of cloud technologies has helped take IT’s responsibilities out of the day-to-day business processes of the organization, including elements such as ensuring servers are up and running and keeping operating systems and software releases up to date.

Black is helping to facilitate the intersection of cloud, mobile and social in a number of areas. For example, with an upgraded IT support solution, Sprouts’ managers and employees can now use a variety of devices – phone, desktop, iPad – to log a help desk ticket when something isn’t working, and also to follow up and track its progress. Social development has been both internal, facilitating employee communications and collaboration, and external, enabling Sprouts to listen and broadcast to multiple social media channels. And all of these solutions are also mobile-enabled, ensuring associates can access the tools they need, anytime and anywhere.

LIFETIME ACHIEVEMENT

Thomas English
Former CIO, Trader Joe’s Supermarkets

Thomas English’s long career in retail technology includes holding a CIO title since 1986 – when Ronald Reagan was president and the Internet was used by only a small handful of people. While English’s first love was music, leading to his attaining a BS in music from Combs College of Music in Philadelphia along with a degree from Temple University, a stint in the armed forces changed the direction of his career. Programming training from the Air Force revealed his love of working with computer technology.

Some career highlights include helping design and build a new data center, forecasting, merchandising and warehouse systems at Pier 1 Imports during the time it was coming out of its former “beads and incense” period. Then at Ernst Home Centers, a 97-store Seattle-based chain, Tom developed an in-house Executive Information System that eventually became part of the curriculum at the University of Washington’s MBA program. That’s also where English was involved in developing the first CAD system for kitchen, bath and custom closet designs.

In 1997 English was recruited to be the CIO of Sears Hardware store division, where a particular challenge was developing a custom executive dashboard and EIS system that integrated the unique merchandising hierarchies from Sears and its newly acquired Orchard Supply hardware stores.

From 1999 until his retirement a few months ago, English was the CIO at Trader Joe’s, charged with developing an IT strategy that would allow the company to grow and expand. This included implementing the retailer’s first POS system that used scanning and product look-up (PLU). Prior to that Trader Joe’s had individually priced every item and only captured two departments, grocery or alcohol, with no SKU information.

English’s job also included replacing almost all of the company’s core business applications, including financials, HR/payroll, merchandising and warehouse functions. All this has taken place with a staff of less than 50 people and during a period when the retailer has grown from just over $1 billion and 100 stores to now nearly $11 billion and 400 stores.

English’s philosophy has been focused on learning the backgrounds of his staff people, their strong and weak points, and then placing them in positions that fit their backgrounds and future objectives. Strong leadership, good communication, and giving people the authority and room to succeed and grow have been key reasons for his success, and his ability to communicate in non-technical business terms in boardroom discussions has helped him always to be included in key company decision making.
[METHODOLOGY]

Candidates were nominated through a transparent online process that was open to anyone in the retail and technology industries. Each nomination included a 13-question survey detailing the project or projects implemented that have driven business value to the retail organization. The nominations also identified what specific areas of the business benefitted, what technologies were used, and what stage the project is in and its ROI timeframe.
A panel of judges rated each nomination on a score of one to 10. The scores were then aggregated to determine overall winners for Strategic Impact, Innovation, and Rookie of the Year. Finalists were determined by those nominees that scored an aggregate 50 points or higher.